Assume that you purchased a $5,000 convertible corporate bond. Also, assume the bond can be converted to 125 shares of the firm's stock. What is the dollar value that the stock must reach before investors would consider converting to common stock? a) $40.00 b) $35.50 c) $45.00 d) $50.00
Assume that you purchased a $5,000 convertible corporate bond. Also, assume the bond can be converted to 125 shares of the firm's stock. What is the dollar value that the stock must reach before investors would consider converting to common stock? a) $40.00 b) $35.50 c) $45.00 d) $50.00
Chapter15: Dividend Policy
Section: Chapter Questions
Problem 11P
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Transcribed Image Text:Assume that you purchased a $5,000 convertible corporate bond. Also, assume the
bond can be converted to 125 shares of the firm's stock. What is the dollar value
that the stock must reach before investors would consider converting to common
stock?
a) $40.00
b) $35.50
c) $45.00
d) $50.00
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